Sullivan v. Murphy
| Decision Date | 26 September 1930 |
| Docket Number | No. 40038.,40038. |
| Citation | 212 Iowa 159,232 N.W. 267 |
| Parties | SULLIVAN v. MURPHY ET AL. |
| Court | Iowa Supreme Court |
OPINION TEXT STARTS HERE
Appeal from District Court, Davis County; E. S. Wells, Judge.
Suit to recover upon and to foreclose a mortgage for two notes, one for $1,200 as to which there is no dispute, and one for $1,500 which is the subject of this contest. The court denied foreclosure for the $1,500, and plaintiff appeals.
Affirmed.
Henry C. & Heinrich C. Taylor, of Bloomfield, for appellees.
The mortgage sued on is dated August 6, 1927, and reads:
The note described in the mortgage is dated August 6, 1927, payable to the order of M. I. Pence on or before August 6, 1928, for $1,200 with the privilege of partial payments signed by Mason Murphy and Mary J. Murphy.
The note which is the subject of contention is dated March 12, 1927, for $1,500, payable twelve months after date to order of B. S. Armstrong, signed by Mason Murphy, Ray Murphy, and Mrs. Ray Murphy. Both notes bear indorsements by the respective payees to the order of the plaintiff dated December 7, 1927--the Pence note without recourse, the Armstrong note without restriction. There is a written assignment of the mortgage from Pence to plaintiff dated December 7, 1927. It was stipulated that the plaintiff would testify that on December 7, 1927, Pence assigned to him in due course the $1,200 note and assigned to him the mortgage; that on December 7, 1927, B. S. Armstrong assigned to plaintiff in due course the $1,500 note; that plaintiff purchased the notes and mortgage in good faith, for value, before maturity, without notice of any infirmity and relied upon the terms of the mortgage as securing the notes, and but for such terms would not have purchased either of them. It was also stipulated that defendants would testify that they did not have any intention in giving the mortgage to secure the payment of the $1,500 note; that part of the land described in the mortgage is their homestead; that the greater part of the money necessary to purchase it was furnished by defendant Mary J. Murphy and she refused to sign the $1,200 note and mortgage until Mason Murphy, in whose name the property was at the time, agreed to convey it to her; that Mary J. Murphy got no part of the $1,200 represented by the $1,200 note, but the money received therefrom went to pay a debt of Mason Murphy, and it was for this reason that she refused to sign the note and mortgage until Mason Murphy agreed, in consideration of her signing it and in further consideration that the homestead was purchased largely with her money, to convey to her the property; that Mason Murphy delayed compliance with the agreement until February 14, 1928, when he executed to Mary J. Murphy a warranty deed of the property subject to a mortgage in the sum of $1,200. It was further stipulated that defendants would testify that the mortgage was not read to or by Mary J. Murphy before she signed it; that Mason Murphy had told her that the mortgage secured only the $1,200 note. It was further stipulated that the purpose and intent of plaintiff in purchasing the $1,200 note and mortgage was to purchase at the same time the $1,500 note and bring it under the terms of the mortgage. The court was authorized to consider the concessions as to what the parties would testify the same as testimony given by them on the stand. The record shows no objections to such proposed stipulated testimony or facts.
Plaintiff says in argument in reply: “There is just one proposition before this court in this appeal: * * * The question is: What are the rights of the appellant, an innocent purchaser for value of the instruments involved; who in purchasing the same justifiably relied upon the solemn averments contained in the mortgage embraced herein, signed and executed by both appellees; who has changed his position to his detriment on the strength thereof, if they now be allowed to deny their binding force; and who has affirmatively pleaded estoppel against both of the appellees.”
Under the stipulation the matters to which the parties would testify must be accepted as in the record without objection. As there is no conflict in the testimony, it must be found as facts that the mortgage was not read to the defendant wife; that defendant husband told her that the mortgage secured only the $1,200 note; that they had no intention in giving the mortgage to secure the payment of the $1,500 note, and that the mortgaged premises included their homestead; that the defendant wife had, as between her and the husband, an equitable interest in the property because of furnishing the greater part of the purchase price; that she refused to sign the $1,200 note and mortgage until the husband, in whose name the property was at the time, agreed to convey the property to her. It is a just inference from this undisputed evidence that the defendants understood that the mortgage did not secure the $1,500 note. The language of the mortgage would justify the ordinary reader in concluding that its purpose was to secure the payment of the $1,200 note named in the condition, the repayment of advances necessary for the protection of the security, and future advances to which the parties might agree. The use of printed forms for promissory notes and mortgages is so universal that we may take judicial notice of the custom. The mortgage is well adapted in its phraseology to misapprehension. It is a just inference also that the inducement to the defendant wife to sign the $1,200 note which was given for money with which to pay a debt of the husband was to withdraw the property from his dominion and from liability for his debts.
The defendant wife was in no wise indebted upon the $1,500 note. It was signed by the husband and two others and presumptively upon its face he would be principal for one-third and surety for the other two-thirds. By the clause in controversy, as plaintiff would have it construed, the wife subjects her property to liability as surety for her husband's debts manifestly contrary to her intention--not merely for his just and acknowledged debts, but for all “claims” against him (if acquired by the mortgagee or his assignee). The “claims” against the husband might arise from his voluntary act, or might be incurred involuntarily. They might arise upon contract or in tort. They might be based upon his liability as principal or as surety. The clause is not limited to any particular person as assignee, but any usurer or speculator, however remote, might acquire the $1,200 note and mortgage and a “claim” against the husband and enforce the “claim” against the property of the wife, and this in the face of her manifest intention to withdraw her property from any liability for the husband's debts. If this clause is sustained, a little addition to it by which the wife would incur general personal liability for such claims might be added and would be sustained under similar circumstances. The wife would, on plaintiff's contention, be subjecting her property (in this case the home of her family) to liability to any unforeseen and uncontemplated “assign” of the mortgage which she was giving for any “claim” against her husband that might be acquired by such an “assign.”
Under the stipulation the plaintiff must be considered as testifying that his intention in purchasing the $1,200 note and mortgage was “to purchase at the same time the $1,500 note and bring it under the terms of the mortgage.” The plaintiff stands, therefore, in the position of a confessed speculator at the expense of the property of the defendant wife for a liability not her's and which she had no intention of assuming.
The mortgage was to Pence and did not in his hands secure the $1,500 note in question. Pence had no interest in that note. Plaintiff as assignee of Pence acquired no interest in the $1,500 note, or in the mortgage as security for that note. He under that assignment stepped into Pence's shoes as owner of the $1,200 note and the mortgage securing that note.
Armstrong had no...
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